The company — which sells exclusively outside the U.S. and spun-out from Altria Group Inc (NYSE:MO) in 2008 — had net income of $1.65 billion, $1.00 per share, on revenue of $6.9 billion. The bottom line beat analyst estimates of 90 cents per share of income, but the top line was light, as analysts expected $7.04 billion.

East Asia and Latin America were strong, but revenues were down in the Middle East and Africa, as the company sought to offset lower volumes with price hikes. Revenues from what the company calls “reduced risk products” like iQoS, which heats tobacco without setting it on fire, doubled, but were still just 16% of the total.

Philip Morris’ Stock Dividend Is Still There

The dividend of $1.07 per share seems safe. It costs the company $1.65 billion to pay out, level with net income for the quarter. The fall of the shares on April 19 means the yield goes up to 5%, which should draw some income-oriented buyers into the stock.

But everyone knows tobacco is a dying industry, a deadly product. Even the company itself knows this, with its new emphasis on products that don’t burn. Until this earnings report, however, Philip Morris had been matching the performance of the Dow Jones Average over the last decade. That, and a steadily rising dividend — it was just 85 cents per share five years ago — were keeping up investor interest.

Investors who bought Philip Morris at the bottom of the last recession, when it was at $36 per share, are now getting $4.28 per share in dividends each year and have seen their shares triple in value. That’s a fat return.

Why PM Investors Should Worry

Investors worried that growth of iQos is slowing after being an initial hit in Japan, and that the $4.5 billion recently used to introduce four new products isn’t showing a return. The result was a massive sell-off in global tobacco stocks, with all the major players now off 20-30% for the year.

Analysts are concerned that the global market for tobacco may finally be following that of the U.S.

Altria, from which Philip Morris was spun-out, is up only 11% over the last five years despite also having a quarterly dividend of 70 cents and a yield of 4.4%. It’s not performing because it’s not growing, sales have been nearly flat for three years. Meanwhile, Philip Morris International had been showing 5% growth.

Going into earnings analysts were split on the outlook for Philip Morris International, with 12 calling it a buy and 8 a hold. But those recommendations were based on it earning $5.26 per share for the year, a figure that does not look obtainable given the first quarter performance.

The Bottom Line for Philip Morris

Tobacco has always been a no-go zone for me. Both my parents smoked but I have yet to light up a cigarette, and only smoked a pipe for a few weeks in college.

The vice market is gravitating away from tobacco, toward liquor companies like Constellation Brands, Inc. (NYSE:STZ) and a host of new investments in marijuana. Constellation is up 94% in the last three years, against PMI’s gain of less than 20%.

If you must go in for vice investments, liquor is quicker with a profit that tastes good.